Aid isn’t just about money

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Aid isn’t just about money

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A UK-funded projects in Nepal, where good quality aid has had a dramatic impact. The development debate in Britain should pay more attention to the quality of aid © DFID

The debate over the aid budget is becoming increasingly intense. In recent weeks, there has been much discussion about whether the commitment to spend 0.7 per cent of national income on aid will be enshrined in law. Reports that the bill won’t be included in May’s Queen’s Speech have led to speculation that the coalition government is planning to drop it altogether, despite vehement denials from the prime minister. Holding the coalition government to account for delivering on its aid commitments is important. But by focusing narrowly on aid volume targets, this debate risks missing the point. We should focus (and even argue) much more about how aid money is spent, and how we can reduce the need for aid in the long run.

One part of the problem is the all or nothing approach of aid’s most trenchant critics. “It doesn’t work perfectly so let’s ditch it” is a well-used refrain that distorts the debate around the UK’s aid spending. Another problem is the way that the aid target is devised. It measures only the volume of spending, not how money is spent or the results it achieves. This makes little sense. Most people would not haggle over the cost of expensive purchases without some idea of the quality of the product. Yet this is exactly what the debate around 0.7 per cent target does—it focuses on quantity over quality. Moreover, the target itself doesn’t only include things that most people would consider to be aid. Donors are allowed to include some spending on refugees and international students, which few people would consider to be “real aid.”

But even within “real aid”—the share of aid that actually ends up being targeted at poverty reduction in developing countries—we need to focus more on quality. The best aid is led and managed by people locally—where possible governments or, in countries with repressive regimes, UN agencies or NGOs. This helps governments and other actors build up the skills and capabilities to manage aid well, rather than always relying on outsiders. Putting governments in the lead enables citizens to hold their own governments accountable for achieving development, rather than looking to donors to solve their problems. Good quality aid is well co-ordinated, and because it is “owned” by local people, it is more sustainable—bringing benefits long after the original donor has packed up and left. In Nepal, this kind of aid from the UK and others has helped to reduce maternal mortality by two-thirds over just 15 years, making a dramatic difference to the lives of women and their families.

Though it may be hard to believe, in the right circumstances, good quality aid also means giving money to some (not all) governments and allowing them to spend it through their own systems. This helps to make those systems more effective, bringing benefits that far outweigh the initial investment, and reduces the need for aid in the long run.

We also know what poor quality aid looks like. It’s driven more by the priorities and interests of rich countries than poor countries. Local people are not involved in making decisions about project design, local knowledge is neglected and projects are often unsustainable, because local people don’t feel they have a stake in them. It is often tied, meaning that donors stipulate that funds must be spent on firms from their home country. This not only prevents local contractors in developing countries from winning contracts that could benefit the local economy, it also considerably increases costs. And it’s uncoordinated, placing a huge burden on already overstretched governments by making them negotiate with multiple donors.

Happily, the UK government has a strong track record of providing exactly the kind of good quality aid that is needed. Recent surveys of progress by donors towards the Paris Declaration targets on aid effectiveness, an agreed set of international benchmarks for good quality aid, have consistently shown the UK as one of the strongest performers across the donor community—ranked third out of 34 donors in a recent analysis by the UK Aid Network. The UK is also leading the way in promoting greater transparency of aid spending, allowing everyone—from UK taxpayers to beneficiaries in developing countries—to see how it is being spent and hold those responsible accountable if things go wrong.

So by all means let’s put pressure on the UK and other donors to meet longstanding commitments on aid spending. But let’s not only focus on the exact share of national income being spent. Instead, we need to ensure that aid is of good quality, and helps to build up government’s own capacities to help themselves. In the long run, this will mean an end to aid dependency—a much bigger prize.

  1. May 3, 2013

    P.Selvaratnam

    Romilly
    Thank you for this piece of writing.

    1. It’s a pity *some donors, including the UK, have been conflict-blind in Sri Lanka:

    UK is one of the donors supporting the Presidential Task Force for Northern Development:
    ‘’The macro-economic decisions that the government makes in terms of developments in the north are not made with the participation of the people or their representatives. This is a major problem and cause for resentment. There is often no consultation with the people. Where there is consultation, the decisions made can benefit the people even more, and be more fully accepted by the people. An example would be the Presidential Task Force for Northern Development. This governmental regulatory body is located in Colombo and is virtually all Sinhalese in its ethnic composition, even though most of the people in the north are Tamil. Several of its members are retired military officers’’ – DISPELLING PERCEPTIONS OF UNCARING GOVERNMENT IN THE NORTH, National Peace Council of Sri Lanka, 26 July 2012, http://www.peace-srilanka.org/media-centre/political-analysis/518-dispelling-perceptions-of-uncaring-government-in-the-north

    ”The nineteen person-Presidential Task Force implementing the government’s “Northern Spring” program has not a single Tamil member and does no consultation with the local communities involved or with their elected representatives, (mostly TNA). Here is what the LLRC says in that regard “The Government should ensure that development activities should be carried out in consultation and with the participation of the local people. Such a transparent approach in administration would make the people feel an ownership to the development activities, as well as give them a sense of participation in nation building (LLRC Final Report 8.207) – LLRC report, an inconvenient truth? , 5 January 2012, http://www.dailymirror.lk/opinion/15903-llrc-report-an-inconvenient-truth.html

    The External Affairs Minister told the parliament a few weeks ago that the Sri lankan govt doesn’t concur with the US-sonsored UNHRC resolution of March 2012 and March 2013. Resolutions are all about implementation of LLRC recommendations. But several weeks ago the govt appointed two PR companies to work with the US:

    ”The hiring of PR firms for lobbying in the United States suggests that the Sri Lankan government is not thinking of changing its own policies. Instead it is thinking it can change the US government by projecting a positive image of developments in the country” – National Peace Council, 16 April 2013, http://www.peace-srilanka.org/media-centre/articles-by-dr-jehan-perera/629-factors-making-for-governmental-victory-at-any-cost-jehan-perera

    2. Though Sri Lanka has been violating the Millennium Development Rights of the Ethnic minorities, conflict-blind donors have been funding its MDGs.

    3.It is very sad find that FCO declined to heed the request of Foreign Affairs Committee to link Prime Minister Cameron’s attendance at CHOGM2013 to improvement in the serious human rights abuses of Sri Lanka: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/68683/Cm_8521.pdf

    4.Japan, a major donor to Sri lanka, has not been heeding the calls by human rights organisations to link its aid to Sri Lanka to human rights.

  2. May 3, 2013

    Jiesheng

    Adherence to an outdated target only means the loss of both development and political support.

    • May 3, 2013

      P.Selvaratnam

      I don’t follow this – can you please expand it?

      • May 3, 2013

        Jiesheng

        I am saying that the longer the UK sticks to 0.7% the less in it able to affect any positive change in development and the more any of the three main parties will lose their popular support.

  3. May 3, 2013

    Emma Baker

    Very interesting, thank you. But I can’t understand why are cuts to India and South Africa going ahead if the budget for aid is increasing? I’ve written a comment on South Africa’s situation, “A Needy Nation?” You can read this here: http://www.adventuresinsierraleone.wordpress.com but an answer to the above question would be much appreciated!

    • May 3, 2013

      Jiesheng

      Emma, 0.7% also covers aid channelled to multilaterals (International Organisations), trust funds within these IOs, NGOs, global funds, CSOs etc etc. DFID/UK is already the largest contributor to the World Bank and its Trust Funds. That’ where the increase will go to.

  4. May 4, 2013

    P.Selvaratnam

    Many Asians, Africans and South Americans don’t want any aid; they want only loans. Most of the aid has been ending up in the pockets of corrupt politicians. Donors should consider requests for aid/loans for specific projects from recipients, instead of stipulating a fixed amount as aid in their budgets.
    SriLankan President is refusing to release the reports on corruption, murders, abductions and disappearances:
    List of Commissions of Inquiry and Committees Appointed by the Government of Sri Lanka (2006 – 2012), 12 March 2012, http://www.scribd.com/doc/85007346/A-List-of-Commissions-of-Inquiry-and-Committees-Appointed-by-the-Government-of-Sri-Lanka-2006-%E2%80%93-2012

    Members of intergovernmental organisations have an obligation to challenge Sri Lanka to release the reports. Donors certainly should.

    Development cart before conflict-resolution horse?

    Paradise Poisoned: Learning about Conflict, Terrorism and Development from Sri Lanka ‘s Civil Wars(2005), John Richardson, Professor of International development in American University’s School of International Service and Director of the University’s Centre for Teaching Experience:
    Paradise Poisoned is the principal product of a seventeen year project, devoted to understanding linkages between deadly conflict, terrorism and development, by viewing them through the lens of Sri Lanka’s post-independence history, from 1948 through 1988. ….. Explaining how tranquillity was supplanted by all-encompassing violent conflict and terrorism became the focal point of my inquiries. ……. How could we have come to this? What could we have done to prevent the conflict that has killed our family members and friends, devastated our lives, destroyed what was being so painstakingly developed? What can we learn and share from our experiences that may help others to avoid following a similar path? How can we share what we have learned most powerfully and effectively?
    The ‘we’ of these questions are, principally, political leaders and citizens of the nations, from Angola to Zaire , that have been victimised by civil war.
    There is another group of individuals, too, who must continue to pose questions about the causes and prevention of civil wars. Foreign political leaders, multilateral and non-governmental organisation leaders, leaders in the private sector and development practitioners share in the responsibility for causing civil wars, though they bear few of the costs.”

    • May 4, 2013

      Jiesheng

      Are you talking about the loans versus grants issue?

      • May 4, 2013

        P.Selvaratnam

        I’m just saying that as someone originating from Asia and listening to others from the Southern hemisphere.
        I’ma victim of conflict-insensitive aid as a re hundreds of millions around the world.

        • May 4, 2013

          Jiesheng

          It’s quite obvious from my name that I’m from Asia too. It’s not like your geographical location in unique to aid impacts–people in the West/North and throughout the world know what aid can and cannot do.

           
  5. May 4, 2013

    P.Selvaratnam

    ”not like your geographical location in unique to aid impacts” – I don’t follow it.

    In the last 5 yrs I’ve been attending meetings ( mostly on aid) in London.

    Asians, Africans and South Americans have been telling : ”Pl give us loans, NOT aid”.

    Well-known economists among them also say the same thing.

    • May 4, 2013

      Jiesheng

      Which well known economists? The UK was against changing the World Bank’s IDA from being a loans facility to being a grant-based facility. What sort of loans are you talking about? All sort of loans/aid–ODA comes with conditions.

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Author

Romilly Greenhill

Romilly Greenhill
Romilly Greenhill is a Research Fellow at the Overseas Development Institute 




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